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Wednesday, June 16, 2010

Day 58 BP Oil Spill: 60,000 Bbl/day; Oval Office Address; $20b Fund

Jun 16: At approximately 2:30 PM this afternoon, the President announced that the Administration and BP executives had reached an agreement on establishing a $20 billion dollar fund to be administered by an impartial third party to begin processing claims for damages and losses as a result of the Gulf oil spill. The President said the $20 billion is not a cap and does not limit BP's liability, responsibility or legal challenges. The funding would be provided over a four-year period at a rate of $5 billion per year, including $5 billion within 2010. Additionally, a $100 million fund will be established for unemployed oil workers (See link below for details).

On June 15, in his first Oval Office address of his presidency, President Obama outlined his commitment to fighting the full impacts of the BP oil spill with everything we've got for as long as it takes. In his prime time address the President said, "The millions of gallons of oil that have spilled into the Gulf of Mexico are more like an epidemic, one that we will be fighting for months and even years. But make no mistake: We will fight this spill with everything we've got for as long as it takes. We will make BP pay for the damage their company has caused. And we will do whatever's necessary to help the Gulf Coast and its people recover from this tragedy. . ."

On the cleanup efforts the President said, "We now have nearly 30,000 personnel who are working across four states to contain and clean up the oil. Thousands of ships and other vessels are responding in the Gulf. And I've authorized the deployment of over 17,000 National Guard members along the coast. . . millions of gallons of oil have already been removed from the water through burning, skimming and other collection methods. Over five and a half million feet of boom has been laid across the water to block and absorb the approaching oil. We've approved the construction of new barrier islands in Louisiana to try to stop the oil before it reaches the shore, and we're working with Alabama, Mississippi and Florida to implement creative approaches to their unique coastlines.

He said secondly, the government is focused on is the recovery and restoration of the Gulf Coast. He said, "Tomorrow, I will meet with the chairman of BP and inform him that he is to set aside whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company's recklessness. And this fund will not be controlled by BP. In order to ensure that all legitimate claims are paid out in a fair and timely manner, the account must and will be administered by an independent third party. Beyond compensating the people of the Gulf in the short term, it's also clear we need a long-term plan to restore the unique beauty and bounty of this region." He announced that he asked Ray Mabus, the Secretary of the Navy, and a former Governor of Mississippi and a son of the Gulf Coast, to develop a long-term Gulf Coast Restoration Plan as soon as possible.

Thirdly, the President said, we're taking steps to ensure that a disaster like this does not happen again." He reminded that a few months ago [See WIMS 3/31/10], he approved a proposal to consider new, limited offshore drilling under the assurance that it would be "absolutely safe." He said, "That obviously was not the case in the Deepwater Horizon rig, and I want to know why. . . "I've established a National Commission to understand the causes of this disaster and offer recommendations on what additional safety and environmental standards we need to put in place. Already, I've issued a six-month moratorium on deepwater drilling. I know this creates difficulty for the people who work on these rigs, but for the sake of their safety, and for the sake of the entire region, we need to know the facts before we allow deepwater drilling to continue."

He announced that Michael Bromwich, who was a tough Federal prosecutor and Inspector General, has been charged to over the next few months, overhaul the Minerals Management Service within the Department of Interior and "build an organization that acts as the oil industry's watchdog -- not its partner." He said, ". . .one of the lessons we've learned from this spill is that we need better regulations, better safety standards, and better enforcement when it comes to offshore drilling. But a larger lesson is that no matter how much we improve our regulation of the industry, drilling for oil these days entails greater risk."

His final point focused on the need to accelerate efforts to develop alternatives to fossil fuels. He said, "The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now. Now is the moment for this generation to embark on a national mission to unleash America's innovation and seize control of our own destiny. This is not some distant vision for America. The transition away from fossil fuels is going to take some time, but over the last year and a half, we've already taken unprecedented action to jumpstart the clean energy industry."

He reminded that last year, the House of Representatives acted and passed what he called "a strong and comprehensive energy and climate bill -- a bill that finally makes clean energy the profitable kind of energy for America's businesses." He continued, "Now, there are costs associated with this transition. And there are some who believe that we can't afford those costs right now. I say we can't afford not to change how we produce and use energy -- because the long-term costs to our economy, our national security, and our environment are far greater.

In a major new development the researchers working on the critical question of how much oil is leaking into the Gulf released their latest estimates. Based on updated information and scientific assessments, Department of Energy (DOE) Secretary Steven Chu, Secretary of the Interior Ken Salazar, and Chair of the National Incident Command's Flow Rate Technical Group (FRTG) Dr. Marcia McNutt (Director of the U.S. Geological Survey) announced an improved estimate of how much oil is flowing from the leaking BP well [See WIMS 6/15/10]. Working together, U.S. government and independent scientists estimate that the most likely flow rate of oil today is between 35,000 and 60,000 barrels per day (bbl/day). The improved estimate is based on more and better data that is now available and that helps increase the scientific confidence in the accuracy of the estimate.

At the direction of the Federal government, BP is implementing multiple strategies to significantly expand the leak containment capabilities at the sea floor even beyond the upper level of the latest flow rate estimate. The Lower Marine Riser Package (LMRP) cap that is currently in place can capture up to 18,000 bbl/day. At the direction of the Federal government, BP is deploying a second containment option, called the Q4000, which could expand total leak containment capacity to 20,000-28,000 bbl/day. Overall, the leak containment strategy that BP was required to develop projects containment capacity expanding to 40,000-53,000 barrels per day by the end of June and 60,000-80,000 barrels per day by mid-July.

Energy Secretary Steven Chu said, "This estimate brings together several scientific methodologies and the latest information from the sea floor, and represents a significant step forward in our effort to put a number on the oil that is escaping from BP's well. As we continue to collect additional data and refine these estimates, it is important to realize that the numbers can change. In particular, the upper number is less certain -- which is exactly why we have been planning for the worst case scenario at every stage and why we are continuing to focus on responding to the upper end of the estimate, plus additional contingencies." Over the weekend, at the insistence of Secretary Chu and the science team, pressure meters were added to the top hat to assist with these estimates.

The scientists stressed the need for continued and refined pressure measurement, but emphasized that the "improved" estimates have a greater degree of confidence than estimates that were possible prior to the riser cut. They said the estimates are better because of more and different kinds of data that is available now and a single flow is easier to estimate versus prior to the riser cut, when oil was flowing both from the end of the riser and from several different holes in the riser kink.

The FRTG was assembled at the direction of National Incident Commander Admiral Thad Allen, and is led by United States Geological Survey Director Dr. Marcia McNutt. The FRTG, and a scientific team led by Energy Secretary Steven Chu, continue to analyze new data and use several scientific methodologies to develop updated estimates of how much oil is flowing from BP's leaking oil well in the Gulf of Mexico.

Its important to note that over a month ago, Purdue University mechanical engineering professor Steven Wereley, the researcher that testified before Representative Markey's hearing on May 19, that the BP leak was much larger than previously estimated. Wereley indicated that the flow rate was at least "an order of magnitude higher" than the 5,000 bbl/day being reported by BP and the Unified Command. Wereley, who is now one of the researchers on the FRTG, used an initial 30-second video clip of the oil gushing from the 21.5-inch pipe that was released by BP on May 12, Wereley deployed a technique called particle image velocimetry (PIV) to create freeze-frame shots of the video. From his calculation, Wereley determined that 56,000-84,000 barrels of oil, plus gas, had been leaking daily into the Gulf -- a flow that was nearly 10 times higher than other estimates at that time [See WIMS 5/29/10].

On June 15, 2010, the President signed into law S. 3473 - Amending the Oil Pollution Act of 1990 to authorize advances from Oil Spill Liability Trust Fund for the Deepwater Horizon oil spill. The bill authorizes the Coast Guard to obtain multiple advances (up to $100 million each), with the total amount of all advances not to exceed the incident cap under current law ($1 billion), from the Oil Spill Liability Trust Fund to underwrite Federal response activities with regard to the discharge of oil that began in connection with the explosion on, and sinking of, the mobile offshore oil unit Deepwater Horizon. The bill was introduced on June 9, by Senate Majority Leader Harry Reid (D-NV) and passed the Senate by unanimous consent and received a 410-0 vote in the House.

In other activities NOAA and Coast Guard seized shrimp taken from the closed fishing area in Gulf; Administration officials met with BP officials on the containment and recovery plans; established three Deputy Incident Commanders under Incident Commander Admiral Thad Allen, to lead oil impact mitigation and cleanup efforts in Alabama, Mississippi and Florida; the Administration continued its oversight over the BP claims process; and more (See link below).

Access a fact sheet on the $20 billion funding and other funds (click here). Access the complete Presidential address (click here). Access links to a video of the address (click here). Access a release on the updated flow rate estimate (click here). Access legislative details on S.3473 (click here). Access a White House summary of the last 24 hours of oil spill activities with extensive links to more information (click here). Access additional information updates and links to releases and briefings on the Administration's response from the Unified Command website (click here). Access the BP response website for links to visuals more information on the recovery work (click here).